If the Current Price of a Bond Is Equal to Its

question 68

Multiple Choice

If the current price of a bond is equal to its face value,

• A)there is no capital gain or loss from holding the bond until maturity.
• B)the yield to maturity must be greater than the current yield.
• C)the current yield must be greater than the coupon rate.
• D)the coupon rate must be greater than the yield to maturity.

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Definitions:

Subalpine Forest

Forest ecosystems found just below the alpine timberline, characterized by cold climates and a dominance of coniferous trees.

Debt-For-Nature Swaps

Financial transactions in which a portion of a developing country's foreign debt is forgiven in exchange for local investments in environmental conservation projects.

Secondary Succession

The ecological recovery process that occurs in an area where the natural vegetation has been removed or destroyed but the soil remains intact.

Large-Scale Ranching

An extensive form of agriculture operation where livestock such as cattle, sheep, or horses are raised on large tracts of land.